Dow Dividend Starting Months/Holding Periods

Some things you should know about the returns shown in the table below:

• The returns shown are the average (compound) annual returns for the 1, 2, and 3 year periods starting at the end of each month from December 1978 through December 1998. That means the last one-year period starts at the end of Dec. 1997; the last two-year period, Dec. 1996; and the last three-year period, Dec. 1995.
• The returns are based on PRICE CHANGES ONLY. Dividends are not included. This is different from the results presented by most others.
• The analysis below ignores commissions.
• Tax consequences are not included since they vary by investors.
• Any spin-offs or distributions, such as Sear's spin-off off Allsate in 1995, are treated by assuming that the shares received are sold at the end of the month in which they are received and the proceeds are used to buy more of the Dow stock that had the spin-off. This is a different assumption than that used on the Historical Returns page.
• It is assumed that an equal dollar amount is put into each stock in the strategy using the closing prices on the last day of the month.
• BTD5: (Beat the Dow 5) - The O'Higgins and Downes strategy of buying the five lowest priced of the ten highest yielding Dow stocks.
• High10: Buy the ten highest yielding stocks in the Dow.

Start   Hold for 1 year Hold for 2 years Hold for 3 years	
Month   BTD5    High10  BTD5    High10   BTD5    High10  


Jan	13.70%	12.38%	16.18%	13.93%	14.90%	13.01%
Feb	16.01%	14.13%	17.13%	15.36%	15.73%	13.94%
Mar	14.81%	12.81%	16.87%	14.31%	15.35%	13.13%
Apr	16.13%	13.51%	17.69%	14.71%	15.72%	13.05%
May	16.48%	13.26%	16.11%	13.96%	14.68%	12.85%
Jun	15.99%	13.84%	15.95%	14.24%	15.07%	13.26%
Jul	17.34%	14.51%	16.10%	14.28%	15.70%	13.74%
Aug	16.50%	14.09%	16.22%	13.91%	16.55%	13.59%
Sep	15.95%	14.13%	16.40%	14.20%	16.55%	13.98%
Oct	17.92%	15.21%	17.61%	14.59%	16.43%	14.04%
Nov	17.56%	15.69%	17.83%	15.52%	16.01%	14.70%
Dec	17.05%	14.34%	18.14%	15.03%	15.81%	14.45%

• The BTD5 has a higher return than the High10 in all cases.
• The best time to execute these strategies is late in the year. This may be due to tax selling and year-end "window dressing" by portfolio managers.

1. The BTD5 held for two years starting late in the year (buy in Nov. or Dec.)
2. The BTD5 held for one year purchased at the end of Oct. or in Nov.